The Hundredth Man

Imagine that there is a small community, of say a hundred people. These hundred people slog all day every day merely to survive. They live at the foot of a mountain, and the only water is at a spring near the top of the mountain. They must have water, so every day every one of these people climbs to the top of the mountain, collects his water, and brings it down again.

Getting water takes up a large part of each person’s time each day. Eventually somebody hits on the idea of building a furrow to run some water down the side of the mountain, into a dam which he builds at the bottom. Then he says to the 99 others: “You can save several hours a day, by taking water from my dam, if you will work for me for 10 minutes a day.”

The other 99 agree, so he makes a profit. But the other 99 are also better off, because nowthey have much more time to use for other purposes.

Then, that hundredth man observes how the water running down the furrow pushes stones and wood along ahead of it. He thinks up the idea of providing power from the running water, and builds a waterwheel with which to grind corn. He has more power than he needs for his own purpose, so he says to the other 99: “I will allow you to grind your corn in my mill if you will give me one tenth of the time you save.”

The others agree, so the entrepreneur increases his profit. The others are better off thanbefore because they have still more time to themselves. They use that time for leisure and to improve their houses and their living conditions. One of them spends his spare time making himself good shoes.

The entrepreneur then says to the shoemaker: “I have spare food and shelter andclothing now, because I am being paid by all the people who are using my water and my mill. I will feed and clothe you better and enable you to stop spending your time on necessities, so that you can devote all your spare time to making many of these good shoes. I will then sell the shoes to the others, who will pay me a small portion of the time they save by not having to make their own shoes, and I will pay you a portion of what they pay me.”

So the entrepreneur makes even more profit, but the shoemaker is better off because he receives some of the benefit, and the other 98 are once again better off because they do not have to spend time making shoes.

Then the entrepreneur notices that someone else makes good clothes, so he makes the same arrangement with him, and so on. Eventually, everyone is doing what they are best at, and everyone has more water, and better food, clothes, shoes, shelter and facilities than they would have had if they were spending all their time looking after their own needs, and everyone has more leisure time to pursue other interests.

Now, what would have happened if, when the entrepreneur had built his furrow down the mountain, the others had said: “We will not pay you for your water; you are not working for it. You want to exploit us. We are 99 and you are only one. We will take what we want.”? Then the man who invented and supplied all these wonderful things which benefitted the whole community would have had no incentive to create those benefits. There would have been no further advancement in the community.

But in our example, the “other 99” do not do that. They accept his proposals in mutual freedom, so he goes on to make more and more proposals, all of which create extra benefits. Eventually, there are children in the community, and now there is enough production for some people to devote themselves to teaching the children – because the community is producing enough to free some of its members from having to take care of the production of immediate needs. Art and music become possible, with those who are good at them able to spend their time on these pursuits, giving the benefit of their creativity to others for a share, in return, of the community’s production.

A good explanation of the role of entrepreneurship, specialization and trade… but I would add explanations of why and how we know that nobody is exploited in this scenario and why the 99 can not achieve the same through a public works scheme or publicly funded research. That’s just me.

This is a variation of the “Pipeline” Story where two brothers were hired by the village to carry buckets of water from a stream to the village cistern. The bigger brother, being stronger, could carry more water than the smaller and made good money by working for his money. However, the younger was smarter and put in a lot of after hours work with no help from his bigger brother who laughed at him as did most of the villagers. While big brother got richer the small brother laboured on quietly in his after hours while still carrying buckets during working hours. He was building a bamboo pipeline from the stream at a point higher than the village. Finally when he turned on the tap he could sit back and watch the water flow into the cistern – and pull in the money while his brother’s work become redundant. All admired him and big brother admitted that he had been wrong. They formed a partnership and started building pipelines for all the surrounding villages. The two become filthy rich and the people enjoyed the product of abundant water supply.

And that my friends is the power of ME (Mulitplying Effect) or Leverage or the fastest growing method of distribution in the world today – NWM (Network Marketing). Many still laugh as did the villagers but in the end they will beg to become part of the network when they see the streams of income that they have been blind to before.

So there’s this small community of 100 people living at the bottom of a mountain. Their only source of water is a spring bubbling out the side of the mountain halfway up its flank. Pretty obviously, this water does not stay halfway up the mountain, but forms a stream which flows randomly down the mountain. All the residents draw their water from this stream at the point nearest to their respective small farms.

One day a resident called Fred gets a brilliant idea. He digs a furrow from the source of the spring directly to his property, then builds a dam on his property. All the available water now runs down the furrow into his dam, and none runs down the old stream. He offers his water in his dam for sale to the now thirsty neighbours. The gripe and moan, but end up agreeing to his terms, working 10% of their time for him in return for water. With his free labour and free water, he quickly becomes the most prosperous farmer in the village.

A couple of the other villagers get together and decide to build their own furrow from the spring. However, when they arrive at the spring they find it has been fenced in, with signs proclaiming “Private Property. Trespassers will be prosecuted. By order of Fred.” Disappointed and fearful of prosecution, they search for another water source, finally finding one much further up the mountain. With considerable difficulty, they dig a furrow back down to the village. When Fred sees the second furrow he flies into a rage. “You cannot use a furrow, or a pipe, or any device for directing the flow of water without my approval. I have claimed the intellectual property right to all such arrangements, and you must immediately desist, or pay me a royalty.” Ten strapping young lads from the village have been hired by Fred to enforce ‘The Law’, as well as the local school teacher to act as ‘The Judge’. When the villagers object, the judge shows them a book in which Fred’s claim to the property around the spring is recorded. He shows them another book in which Fred’s claim to the intellectual rights for furrows and pipes is also recorded. Somewhat bemused, the villagers concede to Fred’s demands and scrap their furrow. To cover his costs, Fred doubles the price of water.

On his property Fred has a tree which grew nowhere else in the district. This tree has many tough leathery leaves. Fred calls it the dollar tree. To simplify the rather complex recording of hours worked by the villagers, Fred now pays a worker one dollar leaf for each hour worked, and charges one dollar leaf for 10 buckets of water. You can only buy water with dollar leaves. Fred owns many dollar leaves.

In order to obtain the water required for survival villagers must now spend 20% of their time working for Fred. Their own farms begin to suffer and fall into neglect. Finally a protracted drought occurs. Water no longer falls from the sky, and the farmers are totally dependent on Fred’s water supply to stay in business. Due to the increased demand, Fred increases the price of water to one dollar per 5 buckets. Many farmers cannot afford to pay for sufficient water to keep their farms going. Fred lends them dollar leaves at a reasonable interest rate, using their farms as collateral. Within a year, Fred owns 50% of the farms in the village. He centralises control of the farms and evicts many of the ex-owners from the land. He controls the village water supply, the food supply, law enforcement and administration, the money supply, the village records. Villagers doff their caps when he walks by.

Pretty soon, Fred moves on to the next village. Using his considerable resources, he repeats his success in village after village. He calls himself the Fred Corporation. Occasionally he encounters a village where a similar entrepreneur has succeeded like himself. Generally he makes an offer which is hard to resist, and his empire grows a little bigger. Sometimes he just ignores a competitor, sometimes he must destroy him. But always he grows, because growth is everything.

Crumbs. Depressing as all hell, but amazing how three similar stories end so vastly differently with just the slightest initial compromise on freedom. I suppose the point is that when your idea comes at the cost of others, or monopolises a shared resource, the result is dominion. You have to actually care about building the wellbeing of the greater community from the start for the first story to apply. Without conscience, monopoly is easier and more profitable. Guess that is where government gets it wrong.

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